Academia Sinica's economic research fellow Ray Chou (周雨田) summed up the institute's view of the current economy as an "accelerated recovery" and "cautiously optimistic."

"We are cautiously optimistic about economic growth in the second half of the year," Chou said, "The economic growth rate in the first quarter was already higher than what we had forecast last year. Nevertheless, the growth rate in the second half of the year will continue to accelerate."

Private Consumption

As indicated in the report, the National Development Council's (NDC) economic indicator has flashed a "green" signal, indicating a stable economy, for four consecutive months. Taiwan's purchasing manager index (PMI) has also exceeded 50, indicating expansion in the manufacturing sector, for 16 consecutive months.

According to the statistics released by the Ministry of Economic Affairs, local business revenues have seen growth since the fourth quarter last year. The consumer confidence index hit a new record in June.

All in all, economic growth momentum is expected to last into the second half of 2014, Academia Sinica said.

Foreign Demand

According to Academia Sinica's report, it is the consensus among international research institutions that the world will see higher economic growth in 2014 compared with 2013.